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  1. Home
  2. IIA Certification
  3. IIA-CIA-Part3 Exam
  4. IIA.IIA-CIA-Part3.v2025-07-07.q379 Dumps
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Question 91

What is the number of production runs per year of computer chairs that would minimize the sum of carrying and setup costs for RCF for the coming year?

Correct Answer: D
The EOQ minimizes the sum of carrying and setup costs. The EOQ is the amount at which carrying costs are equal to setup costs. Thus, plugging the data into the EOQ formula results in the following:

Thus, if each lot consists of 1.000 units, five production runs per year are needed to meet the 5.000-unit demand. At this level, setup costs will total US $5,000 (5 * $1.000) Carrying costs will also equal US $5,000 ($10 per unit carrying cost * average inventory of 500 units). Accordingly, total costs are minimized at US$10,000.
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Question 92

Quality cost indices are often used to measure and analyze the cost of maintaining a given level of quality. One example of a quality cost index, which uses a direct labor base, is computed as
Based upon these costs data, the quality cost index:

Correct Answer: A
The index for May was [US $4,000 + $6,000 + $12,000 + $14,000) - $90,000], and the index for June was 6% [US $5,000 + $5,000 + $15,000 + $-11,000) - $100,000].
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Question 93

The Entity has dividend-payout ratio of:

Correct Answer: D
The dividend-payout ratio is the ratio of dividends paid to profit for the period. Hence, it equals 50.0% US $100 dividends $200 profit). An entity's financial statements for the current year are presented below:

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Question 94

The four categories of costs associated with product quality costs are:

Correct Answer: B
Prevention costs are incurred to prevent defects. Appraisal costs are incurred to detect defective output during and after the production process. Internal failure costs are associated with defective output discovered before shipping. External failure costs are associated with defective output discovered after it has reached the customer.
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Question 95

Organizational activities that complement each other and create a competitive advantage are called a:

Correct Answer: B
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